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On Tuesday, Citi analysts showed confidence in Trip.com Group Limited (NASDAQ:TCOM), raising the price target on the company’s shares to $78.00 from the previous $75.00. The firm sustained its Buy rating on the stock. With a current market capitalization of $43.86 billion and impressive gross profit margins of 81.25%, Trip.com has demonstrated strong financial execution. The adjustment comes after Trip.com’s first-quarter operating margin revealed increased spending on the Trip.com brand, though future operational expenditures are expected to be lower than prior guidance. According to InvestingPro analysis, the company currently appears undervalued relative to its Fair Value.
The travel service provider’s first-quarter revenue met expectations, bolstered by robust growth in domestic hotel bookings and outbound travel volumes, as well as strong performance from the Trip.com brand itself. InvestingPro data reveals the company achieved impressive revenue growth of 19.73% over the last twelve months. Despite challenges such as a weaker domestic average daily rate (ADR) and outbound headwinds stemming from an incident in Thailand, the company’s solid volume growth in domestic hotels and outbound travel contributed to the steady revenue. InvestingPro Tips highlight that Trip.com holds more cash than debt on its balance sheet and maintains liquid assets exceeding short-term obligations, with 8 additional insights available to subscribers.
Looking ahead to the second quarter of 2025, Citi anticipates a slight deceleration in domestic revenue growth due to a higher base for hotel volume, which is likely to be mitigated by an improvement in ADR. Outbound growth may also slow as the market normalizes, but the momentum of Trip.com is expected to continue, supported by ongoing marketing initiatives and geographical expansion.
Citi has marginally increased its earnings estimates for Trip.com for the years 2025, 2026, and 2027 by 1%, reflecting the revised price target. While management’s tone for the second-quarter outlook may not align with investor expectations, Citi views Trip.com as relatively attractive within the internet sector. The firm’s positive stance is underpinned by the resilient performance of the travel industry and the long-term narrative surrounding the Trip.com brand.
In other recent news, Trip.com Group Limited disclosed its unaudited financial results for the first quarter of 2025, filed with the U.S. Securities and Exchange Commission. The specifics of the financial performance were not detailed in the summary, but the report’s authenticity was confirmed by the company’s Chief Financial Officer, Cindy Xiaofan Wang. Jefferies recently raised its price target for Trip.com to $80, maintaining a Buy rating, following earnings that met revenue projections and exceeded non-GAAP operating profit expectations. The firm noted robust domestic travel activity and positive trends in overseas markets, forecasting further improvements in capacity by 2025.
Bernstein analysts maintained their Outperform rating with a $75 price target, citing stable growth in China’s travel sector despite challenges in Southeast Asia. The firm emphasized Trip.com’s attractive valuation and potential for a stronger international business in the latter half of 2025. Additionally, Bernstein reiterated their positive stance, highlighting Trip.com as their top pick in the sector and noting its undervaluation. They anticipate that domestic travel will offset potential declines in outbound travel due to macroeconomic pressures.
Meanwhile, Chinese stocks, including Trip.com, experienced a decline amid escalating trade tensions between the U.S. and China, with the Nasdaq Golden Dragon China Index dropping significantly. Despite these challenges, Chinese officials are reportedly considering measures to stabilize the economy, potentially providing support to affected markets.
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